Omniscient means "all-seeing," and that really describes our narrator here in Cannery Row. The guy knows all about what everyone's thinking and feeling—and he's got opinions on it.
Let's take Lee Chong. When Lee Chong is mulling over Mack's frogs-as-currency proposal, his "mind nosed over the proposition like a mouse in a cheese cupboard. He could find nothing wrong with it" (20.14). This isn't just a little insight into what Chong is thinking; it's also a look at how he thinks. Basically, our narrator just gave us a little tour of the grocer's brain.
And Mr. Omniscient can go even further than that. He also knows that "Lee Chong is more than a Chinese grocer"; he's "an Asiatic planet [. . .] suspended, spinning, whirling among groceries and ghosts (2.1). Again, we don't just know what Lee Chong is thinking, we know all about him metaphysically.
So why go the omniscient narrator route? Steinbeck is trying to tell the story of a community. We want to get to know everyone, not just have one person's perspective on what happens. This way, we feel close to all of the different characters. And only an omniscient narrator could tell us all the metaphysical stuff, too.
Steinbeck does play a little bit with this omniscience business. To pick on Lee Chong some more—the narrator says, "What he did with his money, no one ever knew" (1.3).
Um, okay, Mr. Narrator. Aren't you supposed to be omniscient? Well, here the narrator is limiting himself to the perspective of Cannery Row. So maybe the narrator does know where Lee Chong stashes all of his money—but he's sure not going to tell us.
If you like a little biography along with your narrative, the book's dedication is kind of tantalizing. It's dedicated to Ed Ricketts, the "real life" Doc. Since we know that Steinbeck also hung around Cannery Row, it's tempting to think that some character in the book is a stand-in for Steinbeck. Who do you think it could be? (Our wild guess would be Richard Frost. Don't ask us to justify that.)
Or could it be the narrator—someone, like Doc, who's a little bit above it all?